ZG Group (6676) H2 2024 earnings summary

Executive summary

• Achieved 32.7% year-over-year revenue growth to RMB1,551.0 million, driven by overseas expansion and digital platform services.

• Gross profit increased 12.1% to RMB426.2 million, while overall gross margin declined to 27.5% due to a higher share of lower-margin overseas and non-steel business.

• Loss for the year narrowed sharply by 85.4% to RMB68.7 million, reflecting improved operational efficiency and reduced non-cash expenses.

• Adjusted EBITDA rose 56.1% to RMB7.1 million; excluding non-core items, adjusted EBITDA would have been RMB74.3 million.

• Completed a De-SPAC transaction, listing on the Hong Kong Stock Exchange and raising HK$535.8 million in PIPE investments.

Financial highlights

• Revenue: RMB1,551.0 million (up 32.7% year-over-year).

• Gross profit: RMB426.2 million (up 12.1% year-over-year).

• Loss before tax: RMB67.0 million (improved 85.7% year-over-year).

• Adjusted net loss (non-IFRS): RMB53.7 million (improved 33.0% year-over-year).

• Net cash from operating activities: RMB419.9 million (up 98.4% year-over-year).

Outlook and guidance

• Plans to further expand international business, especially in the Middle East and Southeast Asia.

• Focus on optimizing supply chain, enhancing profitability, and leveraging AI for operational efficiency.

• Continued investment in high-value and green building materials, and digital management systems.